When he was six, Chris Milk borrowed his grandfather’s VHS camera and tried to recreate Michael Jackson’s Thriller video in his backyard. Sensing the whisper of a calling, his mum sent him to summer camp at New York Institute of Tech where he learned to film music videos with other children (then played Frisbee and mini-golf all afternoon). “I was shy so I was assigned the job of holding the boom mic, he says as he sits, ghosted by jetlag and squinting in the sunshine outside the Barbican centre in London. But he felt no frustration at being kept out of the director’s chair. “I was just happy to be at the party.”

Less than two decades later, Milk found himself directing the party, when Kanye West asked him to make the video for his first single, All Falls Down. It was a technical marvel, with West singing into various reflective surfaces (the gleaming paintwork of a sports car, a pair of bling sunglasses) and absolutely no sign of any camera. It was an inspiring partnership, and the pair met again for the lavish Touch the Sky video, in which West plays Evel “Kanyevel”, a 1970s daredevil who launches himself skyhigh in a stars-and-stripes rocket – in homage to the real Knievel.

A world of magic mirrors ... Kanye West's All Fall Down video, created by Chris Milk.

But working with Kanye was a hard-won break. After graduating from a film course at the Academy of Art in San Francisco, Milk spent two long years directing TV commercials for companies from Nintendo to Telstra. “Every night I’d write a treatment for another music video,” he says. “I never went out.” But no record company would take a risk on an unknown. Then, in 2003, the Chemical Brothers offered him a job. “They didn’t care about my reel – they liked my concept. They’re not the kind of artist who just wants to look awesome in front of a waterfall in their videos. They let me get on with the job.”

Over the following four years he worked on videos for U2, Gnarls Barkley and Audioslave, each one using technology to mesmerising effect (for Barkley’s Gone Daddy Gone, Milk recast the band as frantic dust mites, playing their instruments as though through a microscope lens). But his arrival came just as the classic music video was entering its decline: a moment when MTV preferred showing TV programmes to music videos, and YouTube had stepped into the breach, but directors were still making videos in the same old made-for-TV way. “I wanted to make the most of what was now possible,” he says.

So he embarked on the Johnny Cash Project, his first non-linear video made for the post-MTV era. It’s a crowd-sourced music video composed entirely of pencil drawings uploaded by fans – thousands and thousands of them that make up each frame of the film. The idea came from a chance meeting between Milk and the digital artist Aaron Koblin. But they knew they needed the right artist to set the video to. “It had to be such an icon that, when viewed through a thousand different people’s drawings, you could still see the person,” says Milk. There was also the risk of vandalism. “We needed to ensure we didn’t end up with a hundred thousand dick pics.”

One of thousands of drawings uploaded for Milk's crowd-sourced music video, The Johnny Cash Project. Image: courtesy Chris Milk

The following week, Milk ran into his friend Rick Rubin in LA and told the music producer his idea. Right away, Rubin invited Milk to his house and played him one of Cash’s final recordings, Ain’t No Grave – he had been holding on to it for the “right moment”. The American spiritual, written in the 1930s, is about mortality, resurrection and eternal life. “It was perfect,” says Milk. “The idea that Cash achieves eternal life through the hearts and minds of the people around the world that he’s touched. Through their love, the ghost in the machine comes out and plays this last time …”

The Johnny Cash Project’s success, he believes, was down to its novelty. “It’s difficult to imagine an unlimited amount of projects told in this way,” he says. Nevertheless, he is now committed to finding the next big platform. “I want to figure out what comes after cinema as the gold standard for storytelling,” he says. “I was born into a world in which the most compelling stories are through film. But that wasn’t always the case. Everything changes, everything evolves.”

Chris Milk on the set of the YouTube music awards testing lighting for Eminem's set. Photograph: Spike Jonze

Now 38, Milk is the superstar artist in Digital Revolution, a new Barbican exhibition on the past and future of digital art, for which he has created a spectacular interactive work. His love of technology runs deep: his mother, a programmer for Grumman Aerospace, taught him and his brother to code Basic when they were still at primary school. At college, he would stay up all night in the computer science lab, learning how to model 3D graphics – but he has always viewed technology as a means to an artistic end. “If you’ve never mixed paint, you aren’t going to be able to paint properly,” he says.

After Johnny Cash, the next step in his journey to find that “gold standard” of storytelling came with a collaboration with Arcade Fire: a web-only video for the song We Used to Wait, dubbed the Wilderness Downtown. Using Google Maps, users entered their childhood postcode to create a personalised journey that played on their sense of nostalgia. “A lot of people ask which came first – the technology, or the desire to use this song in this way,” he says. Each fed into the other, but Milk worried still that the project was only popular because of its novelty factor rather than some deeper level of emotional engagement with the audience.

The ultimate challenge is how to remove the interfaces that are “an emotional barrier” between the viewer and the work: the keyboard and mouse, and, to a greater extent, the rectangles through which all film, TV and even paintings are viewed. His piece at the Barbican exhibition explores that idea. You walk in front of a triptych of screens and cast a silhouette on each (via Kinect motion sensors). On the first panel your outline scatters into a confetti of birds. In the second, the birds tear off your arms with Hitchcockian glee. In the final panel, you sprout gigantic wings. “The way people react to this piece is so different to anything I’ve ever done in a rectangle,” says Milk. “People laugh and dance and swing each other around. They feel like they are inside it.”

But it’s a limited audience who will be able to experience this. Milk wants to create art that can impact millions simultaneously, so he’s turned to virtual reality, which is set to make a triumphant return in the form of the Oculus Rift, VR goggles built from smart-phone technology. He is unequivocal about it: VR is what will succeed film as the “future of storytelling” and the “next great canvas for human expression”.

Milk speaks from experience. In 2013 he used a commercial commission from the US car maker Lincoln to reimagine the music concert in a way that shows the potential of VR. He made a 10-minute live music video with Beck (a cover version of David Bowie’s Sound and Vision). In it, Beck stands on a rotating platform in the middle of an auditorium. The audience sits around him on another stage, rotating the opposite way, while a 200-piece orchestra stands around the sides. The show was filmed by a number of 360-degree cameras, and Milk designed a special headset that simulates how sound enters the human brain as people turn their heads. The VR film debuted at the Sundance Film festival this year. Viewers can watch the performance from multiple positions, looking around and hearing the musicians as if they were in the room.

It’s an extraordinary experience that proves the potency of VR: “You remember it not as a piece of media, but as a place in time and space in which you existed.” Here, Milk has found a world where his childhood dreams are not only realised but surpassed. “All these experiments I’ve done over the years with technology have been asking whether I can tell stories that affect humans in a deeper way than I could without the technology.” It looks as if he’s finally found the answer.